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Adecco maintains strong double-digit revenue growth in Q1

Adecco maintains strong double-digit revenue growth in Q1
Solid EBITA margin progression as profitable growth remains key focus

Adecco Group, the worldwide leader in Human Resource services,
has announced its results for the first quarter of 2011.

Revenues in Q1 2011 were up 24% or 18% organically, to EUR 4.9 billion. The Q1 2011 EBITA margin before integration costs was 3.6%. DSO were 54 days in Q1 2011 unchanged compared to the prior year.

Patrick De Maeseneire, CEO of the Adecco Group said: We achieved yet again strong double-digit revenue growth in Q1. After 17% organic top-line growth in Q3 and Q4 of last year, revenues are up 18% organically this quarter, and this despite an increasingly higher base. While our growth continues to be mainly driven by the Industrial business, the Office business now grows at double-digit rates as well. Growth in Professional Staffing
is encouraging, but the Industrial business clearly still drives the strong top-line development. Our main markets, France and North America, maintained very robust growth rates in Q1. Our businesses in Germany, Italy and the Netherlands had outstanding growth, clearly above the market. Japan and the UK & Ireland returned to
positive organic growth this quarter. We continue to focus on strict pricing and cost control and with the progress achieved to date, we are well on track to reach our mid-term EBITA margin target of over 5.5%.

Q1 2011 FINANCIAL PERFORMANCE

Revenues
Group revenues in Q1 2011 were EUR 4.9 billion, an increase of 24% compared to Q1 2010. Organically, revenues were up 18%. Permanent placement revenues amounted to EUR 86 million, an increase of 35% in constant currency or 26% organically, while outplacement revenues totalled EUR 50 million, declining by 22% in constant currency.

Gross Profit
In Q1 2011, gross profit amounted to EUR 854 million and the gross margin was 17.4%, down 60 bps compared to the prior years first quarter and down 80 bps organically. Temporary staffing had a negative impact on the gross margin of 40 bps in Q1 2011, whereof 20 bps related to the French payroll tax subsidy cut. Whereas permanent placements had a positive impact of 10 bps in Q1 2011, the outplacement business negatively impacted the gross margin by 40 bps, and other activities had a negative impact of 10 bps.

Selling, General and Administrative Expenses (SG&A)
SG&A in Q1 2011 increased by 14% compared to Q1 2010 to EUR 682 million. Integration costs totaled EUR 3 million in Q1 2011 (Q1 2010: EUR 5 million). Organically SG&A was up 6%, compared to the same period last year, and increased 1% sequentially in constant currency and before integration costs. Organically, FTE employees increased by 4% (1,200) compared to the first quarter of 2010. Sequentially, FTE employees were flat. The branch network, on an organic basis, increased by 1% (40 branches) compared with the first quarter of 2010. At the end of the first quarter of 2011, the Adecco Group had over 32,000 FTE employees and operated a network of close to 5,500 branches.

EBITA
In the period under review, EBITA was EUR 172 million compared with EUR 113 million reported in the first quarter of 2010. The Q1 2011 EBITA margin was 3.5% compared to 2.8% in Q1 2010. EBITA before integration costs was EUR 175 million, up 43% organically and the margin was 3.6%.

Amortisation of Intangible Assets
Amortisation in Q1 2011 was EUR 14 million compared to EUR 13 million in Q1 2010.

Operating Income
In Q1 2011, operating income was EUR 158 million. This compares to EUR 100 million in the first quarter of 2010.

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